[Click eStock] "JYP Entertainment, Strengthening Artist Momentum in the Second Half"

[Asia Economy Reporter Song Hwajeong] Kiwoom Securities maintained a 'Buy' rating and a target price of 58,000 KRW on JYP Ent. on the 24th, anticipating that the artist momentum in the second half of the year will strengthen compared to the first half.

JYP Ent. recorded sales of 40.6 billion KRW in the second quarter of this year, an 18.8% increase compared to the same period last year, and operating profit rose 6.0% to 9.6 billion KRW. Namsoo Lee, a researcher at Kiwoom Securities, analyzed, "Operating expenses increased by 49.8% due to one-off costs such as deferred album sales performance from June releases, taxes, consulting, and rookie development expenses, resulting in a somewhat sluggish operating profit margin of 23.7%. Domestic album sales were 1.5 million copies, slightly down from last year due to the disbandment of GOT7, but overall album performance grew thanks to the effect of NiziU, which debuted in Japan."

From early next year, when rookie debuts are scheduled, a full-fledged increase in album sales is expected to begin. Up to next year, three teams?Blind Package, LOUD, and STUUDIO J?and two teams including NiziU Boys are preparing until 2023. The researcher stated, "Existing artist activities enter a full monetization phase by securing concert setlists after album sales and fandom formation during the first to third years after debut. JYP Ent. has the capability to shorten the period to reach the monetization level by continuing debuts through audition programs," adding, "They utilized the COVID-19 period as a focus time for rookie debuts and will benefit from the shortened monetization timing in the post-COVID era."

In the second half of the year, the growth momentum of second-generation artists is expected to accelerate further. Stray Kids and ITZY’s first full-length albums, which achieved 930,000 pre-orders in the third quarter and are expected to become the first million sellers, are scheduled, along with activities by TWICE, 2PM, and NiziU in Japan. The researcher predicted, "Considering that K-pop holds intellectual property (IP) dominance domestically and internationally, new investments in related industries such as the metaverse and non-fungible tokens (NFTs) will create strategic synergies with artist activities."

This content was produced with the assistance of AI translation services.